FROM:
Development Services
SUBJECT:
Title
Resolution Approving the First Amendment to Commercial Lease Agreements for Fire Station 71, Fire Station 73, Fire Station 74, Fire Station 77, Fire Station 78, Fire Station 79, and Fire Station 81.
End
RECOMMENDATION:
Recommendation
Adopt Resolution No. 2026-015, approving the First Amendment to the Commercial Lease Agreements between the City of Fontana and the Fontana Fire Protection District for Fire Stations 71, 73, 74, 77, 78, 79, and 81, and authorizing the City Manager to enter into the amendment on behalf of the city.
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COUNCIL GOALS:
• Improve public safety by increasing operational efficiency, visibility; and,
• Practice sound fiscal management by living within our means while investing in the future.
• Practice sound fiscal management by developing long-term funding and debt management plans.
DISCUSSION:
The City of Fontana owns seven separate properties improved with Fire Stations and other improvements. These Properties are known as Fire Station No. 71 (APN 192-042-26), Fire Station No. 73 (APN 0230-041-01), Fire Station No. 74 (APN 0237-201-27), Fire Station No. 77 (APN 0256-011-22), Fire Station No. 78 (APN 0228-233-01), Fire Station No. 79 (APN 1107-262-58) and Fire Station No. 81(APN 1118-371-37). In December 2022, the City Council approved six Commercial Lease Agreements between the City of Fontana and the Fontana Fire Protection District for Fire Stations 71, 73, 74, 77, 78, and 79. The Commercial Lease Agreement for Fire Station 81 between the City of Fontana and the Fontana Fire Protection District was approved in Spring 2024.
Staff is now requesting approval of a First Amendment to each of the seven (7) Commercial Leases Agreements to adjust rent and to clarity certain maintenance and insurance provisions.
The proposed First Amendment to each Commercial Lease Agreement would include the following changes:
• Rent Adjustment
Increase rent by ten percent (10%) effective March 1, 2026, resulting in a rate of $1.05 per square foot per month. Monthly and six-month rent amounts will be calculated based on the square footage of each facility, as set forth in the applicable First Amendment. All other rent terms, including the annual rent increases in Section 4(c) of each Commercial Lease Agreement will remain unchanged.
• Maintenance Clarification
Clarify the maintenance provision in Section 11 (a) of each Commercial Lease Agreement by adding omitted language to confirm that the City should have a reasonable period of time to complete repairs.
• Insurance Clarification
Correct a typographical error in the liability insurance in Section 16 (b) of each Lease Commercial Agreement to clarify the required coverage limits of not less than $2,000,000 per occurrence and $4,000,000 in the aggregate.
FISCAL IMPACT:
With approval of the First Amendment to the seven (7) Lease Agreements, the Fontana Fire Protection District will pay approximately $534,277.80 per month in total rent for Fire Stations No. 71, 73, 74, 77, 78, 79, and 81, commencing March 1, 2026. Lease payments will continue to be made on a bi-annual basis in January and July, and will reflect the amount due for the upcoming six-month period. The estimated payment for each six-month period following the rent increase will be approximately $3,205,666.80,subject to annual rent adjustments in accordance with the lease agreements. Rental income will be deposited in Fund 115.
MOTION:
Approve staff recommendation.